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UPDATE 1-Baluchistan objects to Antofagasta/Barrick venture

by Zeeshan HaiderReuters
September 22nd, 2011

ProtestBarrick Editor's note: What the journalist fails to note is the the ethnically and linguistically distinct Baloch population has been engaged in a long-standing independence movement since Balochistan was annexed to Pakistan, one year after Pakistan's creation.

(Adds Baluchistan official's comment)
* TCC officials hoped for positive response this month
* $3.3 bln project facing difficulties since last year
* Reko Diq would be largest FDI in Pakistan mining

ISLAMABAD, Sept 22 (Reuters) - Pakistan's Baluchistan province has objected to a mining lease being sought by a joint venture between Antofagasta and Barrick Gold , further delaying a major planned copper and gold project in the country's southwest.

London-listed Antofagasta and Canadian group Barrick Gold are partners in the Tethyan Cooper Co (TCC) joint venture which has a 75 percent interest in the Reko Diq project and submitted an application for a licence in February.

Samia Ali Shah, a spokeswoman for TCC, which has been meeting Pakistani officials in recent months in the hope a decision would be reached in September, said Baluchistan had raised "observations" to its application for a mining licence.

"We have been asked to reply to the observations raised by the government of Baluchistan within 30 days," she said.

A Baluchistan official who asked not to be named confirmed provincial chief minister Nawab Mohammad Aslam Raisani had raised "objections" to the granting of a licence.

"The TCC was served the notice of objections yesterday (Wednesday)," he said.

Antofagasta and Barrick spent $200 million in 2006 buying the exploration licence from rival BHP .

SECOND MAJOR PROJECT

Reko Diq -- which will be only the second significant project in the mineral-rich region, along with smaller, Chinese-operated Saindak -- holds an estimated 5.9 billion tonnes of mineral resources, with an average copper grade of 0.41 percent and an average gold grade of 0.22 grams per tonne.

 The $3.3 billion project has faced difficulties since last year when Baluchistan said it would cancel the project amid growing anger over outsiders exploiting natural resources in Pakistan's biggest and poorest province.

Baluchistan was initially barred by Pakistan's supreme court from giving approval until a separate investigation over the awarding of the concession to TCC was over. In May, the court said the provincial government could decide on the lease.

If approved, the Reko Diq will mark the largest foreign direct investment into Pakistan mining and a major investment in Baluchistan, which TCC said could transform the region. At its peak, it is likely to employ 11,000 people.
Separatist guerrillas in Baluchistan, on the border with Afghanistan and Iran, have for decades been fighting a low-level insurgency for control of provincial gas and mineral resources, which they say are unfairly exploited by the country's richer and more powerful provinces.

The project is expected to produce 200,000 tonnes of copper and 250,000 ounces of gold per year. The start of production has been pushed back one or two years from the original 2015 date. (Additional reporting by Gul Yusufzai; Editing by Augustine Anthony and David Cowell)

 

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